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AGF set to provide Sh2.6bn for SMEs

BIKPO

African Guarantee Fund CEO Felix Bikpo. FILE PHOTO | NMG

Small firms carrying out projects deemed as environmentally friendly will benefit from Sh2.6 billion “affordable” loan guarantee from Nairobi-based African Guarantee Fund (AGF).

AGF chief executive officer Felix Bikpo said the funds will empower firms, via local currency-denominated funds, participate in tendering opportunities in energy, infrastructure, agri-business and green growth thereby enhancing ability to handle big ticket jobs.

“Strengthening African Small and Medium Enterprises (SMEs) is critical to enhancing their global competitiveness in the development agenda. With this increased capacity, AGF will support larger local currency transactions for SMEs involved in all sectors,” he said.

Investment Fund for Developing Countries (IFU) injected Sh1.55 billion to become Fund’s partner and donated Sh200 million grant to its Capacity Development Trust.

READ: Loan guarantee funds to the rescue of small firms

At the same time, Nordic Development Fund increased its shareholding by Sh1.04 billion and gave the Trust Sh150 million grant.

Nordic shareholding solely targets SMEs investing in climate and green-growth oriented activities.

AGF mobilises private funds used to guarantee loans to SMEs by African banks.

Local contractors have in the past shied away from big-ticket jobs owing to lack of capital and affordable credit, which has always seen foreign contractors win contracts.

This has exported local jobs as well as hindered contractors from building capacity to handle big jobs.

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